Stablecoins in Nigeria: A Growing Cross-Border Channel

IMF News, June 16, 2026

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Nigerian households and small firms increasingly move money across borders via smartphones, digital wallets, and U.S. dollar–pegged crypto assets known as stablecoins.
Nigeria received about $59 billion in crypto-asset inflows between July 2023 and June 2024.
Nigeria ranked second globally on Chainalysis’s 2024 Global Crypto Adoption Index, and sixth in 2025.
Within sub-Saharan Africa, Nigeria accounts for roughly 60 percent of stablecoin inflows since 2019.
Stablecoins form a key bridge between crypto markets and the traditional financial system, as detailed in analysis in the IMF’s latest annual economic health check for Nigeria (Article IV report, Annex VII).

Practical advantages:
- Allow users with a smartphone and internet access to receive remittances or make cross-border payments in minutes, often at lower cost than traditional channels.
- Provide a practical alternative for households and small firms with limited access to formal banking services.
Global drivers:
- Stablecoins are relatively stable in value, easy to transfer, and widely used as settlement assets within crypto markets.
- Facilitate trading between exchanges and provide a convenient store of liquidity.
- For remittances, they can undercut conventional channels, where the average cost of sending US$200 to sub-Saharan Africa remains around 9 percent of transaction value, well above the global average of 6 percent, according to the World Bank.
Domestic drivers:
- In 2023 and 2024, sharp depreciation of the naira, high inflation, and constrained access to foreign exchange increased demand for dollar-linked assets.
- Stablecoins offered both a hedge against currency risk and a tool for paying overseas suppliers.
- After the Central Bank of Nigeria (CBN) restricted banks from servicing crypto exchanges in February 2021, activity shifted to less regulated channels, notably peer-to-peer platforms.

Benefits:
- Faster, cheaper cross-border payments can support trade, remittances, and financial inclusion.
Concerns:
- Monetary sovereignty: widespread use of U.S. dollar–denominated stablecoins can resemble a digital form of dollarization and, by reducing demand for the local currency, could weaken the transmission of domestic monetary policy.
- Financial integrity: activity shifting from banks to digital wallets and crypto exchanges may escape monitoring systems designed for traditional intermediaries.
- Speed and anonymity of some platforms can increase risks of illicit finance, including money laundering.
The risks are not unique to Nigeria, but the scale of adoption makes them more pronounced.

First, safeguard monetary stability.
- The most effective defense against digital dollarization is a stable and credible domestic currency.
- Nigeria’s recent macroeconomic reforms and tighter monetary policy have helped restore confidence in the naira; sustaining this progress will be critical.
Second, strengthen oversight.
- Nigeria has taken steps, including Nigeria’s Securities and Exchange Commission rules for virtual asset service providers and CBN guidance on their interaction with banks.
- Next step: clarify the treatment of stablecoin issuers and align domestic rules with emerging international frameworks, such as those in the European Union, Singapore, Hong Kong SAR, Japan, and the United States, while adapting them to local conditions.
Third, improve data.
- Policymakers need better visibility on how stablecoins are used, particularly at the interface with the domestic financial system.
- Combining blockchain analytics with reporting on naira–stablecoin conversions would help regulators identify risks early and respond more effectively.
Fourth, upgrade the payment infrastructure.
- Much of the demand for stablecoins reflects gaps in existing systems.
- Nigeria has made progress through instant domestic payments and participation in regional initiatives such as the Pan-African Payment and Settlement System.
- Further investment in faster, cheaper, and more interoperable cross-border systems could reduce reliance on unregulated channels.

Stablecoins are neither a passing trend nor a complete substitute for traditional finance; they are a response to persistent frictions in cross-border payments.
The policy challenge is to narrow the gap that made the workaround attractive, while ensuring that new risks remain contained.
A clear strategy is required: open to innovation but anchored in sound macroeconomic policy and effective regulation.

By Axel Schimmelpfennig and Bo Zhao